LDK Solar Hires Citigroup to Pursue ‘Flexibility’ on Debt

Dec. 12 (Bloomberg) -- LDK Solar Co., a Chinese
photovoltaic manufacturer with more than $3.1 billion in debt,
hired Citigroup Inc. to help renegotiate its liabilities.

The company has “entered into discussions with certain
creditors to obtain additional flexibility,” Xinyu, China-based
LDK said today in a statement.

The Chinese government is offering support to selected
solar manufacturers, and LDK may be seeking access to that
financial lifeline, Edwin Mok, an analyst at Needham & Co. in
San Francisco, said today in an interview.

“In China, there’s some opportunity for these challenged
solar companies to find ways to get financing or liquidity, and
Citi will help them figure out the best way to do that,” Mok
said. “The company has a very challenging balance sheet.”

Chinese solar companies gained today after a report that
the government has allocated 13 billion yuan ($2 billion) in
subsidies for domestic solar companies this year. A glut of
capacity has depressed prices and profits worldwide. LDK climbed
15 percent to $1.20 at the close in New York.

LDK, the biggest maker of wafers for solar cells after GCL-Poly Energy Holdings Ltd., last week cut its full-year forecast
for sales and shipments on waning demand.